Cohabiting Couples and Cohabitation Agreements

06 October 2017

In 2016, there were 18.9m families in the UK. Of those, 12.7m were married or civil partners. Cohabiting couples (unmarried) was that fastest growing family type between 1996 and 2016, more than doubling from 1.5m families to 3.3m families. (Information from ONS)

Many people that cohabit together are under the misconception that they have a “Common Law Marriage”. However, there is no such thing! Cohabiting couples do not have the same financial claims upon the breakdown of their relationship, as a spouse or civil partner would.

Cohabiting couples can regularise their living together arrangements by way of entering into a Cohabitation Agreement. Cohabitation Agreements can include many financial aspects of relationships including defining contributions to the mortgage/bills, payment for motor vehicles, holidays, etc. and what should happen upon the breakdown of the relationship.

A Cohabitation Agreement can be particularly helpful where you have already defined your beneficial interest in a jointly owned property by way of a Declaration of Trust and you want to ensure that payment of bills and property expenses will not impact on what you intended. It can also deal with issues such as the continued occupation by your partner in the event of your death, (subject to any provision you may have made in a Will).

During the course of a relationship, future intentions may change and marriage may be considered. It may then be appropriate to enter into a Pre-Nuptial Agreement to try to regulate your financial circumstances in the unfortunate event of your marriage ending in Divorce.

A Pre-Nuptial Agreement is not legally binding but, where a marriage breaks down, it can be highly persuasive and upheld by the Court in subsequent Divorce/financial proceedings. This is a complex area of law and certain conditions have to be met, one of which is that the parties both obtain independent legal advice.

Different reasons for entering into a Pre-Nuptial Agreement are, for example, where there are children from previous marriages to protect their potential inheritance, where one party makes a much greater financial contribution than the other party at the start of the marriage or to protect parties’ potential future inheritances.

by Mandy Spring

Main Unmarried Couples and Families Page